Visa Research 90% of Stablecoin Transactions Are Done by Bots and Big Traders
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Recent research by Visa and Allium Labs suggests that most stablecoin transactions are initiated by bots and large traders, not real users.
The dashboard, which is designed to identify transactions made by real people, found that only $149 billion of the total $2.2 trillion in statistical coin transactions in April came from “organic payment activity.”
The same study found that USDC, the stablecoin issued by Circle, outperformed Tether's USDT stablecoin. Specifically, an on-chain analysis from Nansen showed that the overall stablecoin outperformed Visa 2023's monthly average.
Visa's research directly counters the argument of stablecoin proponents who say it is revolutionizing the current $150 trillion payments industry.
Despite the support and optimism from financial technology firms such as PayPal and Stripe, data suggests that adoption of these tokens as a true means of payment is still in its infancy.
“[…] Stablecoins are still at a very nascent stage in their evolution as a payment instrument,” says Pranav Sood, General Manager EMEA at payments platform Airwallex.
Sod said the stablecoin may have “long-term potential,” but commented that its short- and mid-term focus should be “ensuring existing railroads work better.”
According to Glassnode data, the total market circulation of 3 trillion dollars allocated to digital tokens at the peak of the 2021 bull market is actually closer to 875 billion dollars, which shows the difference between nominal and “real” value of digital assets.
Glassnode published a Q2 report showing that the stablecoin's network speed, a measure of how quickly value moves around the network, is approaching 0.2 on a cumulative scale. This means that 20% of the total fixed coin supply is transacted daily.
The issue of double-counting stablecoin transactions is also a concern. Key Sheffield, Head of Visa Crypto, explained that converting decentralized currency $100 Circle USDC to PayPal PYUSD will result in Uniswap's total stablecoin volume registering $200 on chain.
Visa, which handled more than $12 trillion in transactions last year, is among the companies that stand to lose if stablecoins become a widely accepted payment method. Bernstein analysts predict that the value of all stablecoins in circulation could reach $2.8 trillion by 2028, an 18-fold increase from their current combined circulation.
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